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Accommodation
The property has been measured by BKR Floor Plans and provides the following accommodation:
| Net Internal Areas: | ||
| Ground Floor | 81.66 sq m | 879 sq ft |
| First Floor | 84.45 sq m | 909 sq ft |
| Second Floor | 76.46 sq m | 823 sq ft |
| Third Floor | 58.99 sq m | 635 sq ft |
| Total | 301.55 sq m | 3,246 sq ft |
| Gross Internal Areas; | ||
| Ground Floor | 112.69 sq m | 1,213 sq ft |
| First Floor | 116.03 sq m | 1,249 sq ft |
| Second Floor | 102.38 sq m | 1,102 sq ft |
| Third Floor | 84.26 sq m | 907 sq ft |
| Total | 415.36 sq m | 4,471 sq ft |
A measured survey report is available to download and will be re-addressed to a purchaser at a cost of £630 + VAT.
Tenure
Freehold.
Tenancy
The property is entirely let to Hogans Music Limited on a full repairing and insuring lease for a term of 9.25 years from 1st March 2023, expiring on 31st July 2032, without breaks.
The lease is subject to personal guarantees from the two company Directors.
The property has been let at £60,000 per annum. The tenant has been granted in effect 5 months’ rent free on the basis of the first two months without rent payment and the subsequent months until April 2025 on an increasing stepped basis. The vendor will make-up the concession by an appropriate adjustment on completion, so a purchaser benefits in effect from £60,000 per annum from the date of purchase.
On 1st March 2028 there is an open market rent review.
The ground floor and second floor small office has been sub-let to Corn Exchange (Newbury) Trust for a term of 1 year from 1st September 2022, expiring 31st August 2023 at a rent of £25,000 per annum.
The permitted use under the terms of the lease is a retail shop, showroom, teaching rooms, offices, recording studio and associated offices or with the Landlord’s prior written consent (such consent not to be unreasonably withheld) such other office use within Use Class B1 and E of the Town and Country Planning (Use Classes) Order 1987.
See below the section on permission to convert to residential.
Covenant
Hogan Music’s mission is to get as many people as possible making music and is a one stop shop for all musical needs. Within their new centre in Newbury the company has six fully equipped music rooms where they offer a range of music lessons for a variety of instruments, DJ and vocal lessons. They are also the largest outsourcer of Music Tuition into schools across the county and are increasing their reach beyond. Hogan Music also offers a broad range of instruments to hire and caters for repairs, upgrades, modifications and general maintenance for most types of musical instruments, amplifiers, sound and PA equipment. They also host regular workshops, courses, masterclasses and events. For further information visit www.hoganmusic.co.uk.
The lease is personally guaranteed by the two company Directors. For further information please refer to the data room.
VAT
The property has been registered for VAT. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).
Upper Floors Potential
Although they are currently demised to the tenant, we suggest there is future potential to convert the upper floors to residential use. In July 2021 planning permission was granted for change of use of the first, second and third floors to form five residential flats. To view the planning consent see here.
Proposal
We are instructed to seek a figure of £715,000 (Seven Hundred and Fifteen Thousand Pounds), subject to contract, reflecting a net initial yield of 8.0%.
Please note that a purchaser will be re-charged the cost of the searches (£1,185) and measured survey (£635 + VAT) which are provided in the data room.
Please note a purchaser will be charged a Transaction Fee of £5,000 + VAT.
Investment Considerations
An opportunity to acquire an attractive commercial investment in an affluent South East town;
The property occupies a prominent position in the heart of Newbury town centre;
Let on a new lease from March 2023;
Attractive 9.25 years unexpired lease term;
Future potential to convert the upper floors to residential use;
Freehold;
A purchase at the asking price will provide an investor with an attractive yield;
An attractive lot size to an investor.
